MPs call for gig economy loopholes to be closed

THE Government is being urged to close loopholes allowing companies in the gig economy to use “bogus” self-employment status to hire cheap labour and avoid tax.

Two Parliamentary committees published a draft Bill aimed at tackling the “exploitation” of workers to give firms a competitive advantage.

There should be a new presumption of “worker by default”, requiring companies to provide basic safety standards and benefits, said the Work and Pensions and Business Committees.

Unions are campaigning to have employees in gig companies classed as “workers” rather than self-employed, so they qualify for rights such as sick pay.

Firms argue that workers enjoy the flexibility of being selfemployed.

A joint report from the committees calls for legislation to introduce greater clarity on definitions of employment status, saying workers should not be “burdened” by risks associated with flexible working.

The MPs also called for action to close the loophole enabling agency workers to be paid less than permanent employees doing the same job.

Labour MP Frank Field, chairman of the Work and Pensions Committee, said: “The two committees are today presenting the Prime Minister with an opportunity to fulfil the promise she made on the steps of Downing Street on her first day in office, with a draft Bill that would end the mass exploitation of ordinary, hard-working people in the gig economy.

“The Bill would put good business on a level playing field, not being undercut by bad business.

“It is time to close the loopholes that allow irresponsible companies to underpay workers, avoid taxes and free ride on our welfare system.”

Labour MP Rachel Reeves, who chairs the Business Committee, said: “Uber, Deliveroo and others like to bang the drum for the benefits of flexibility for their workforce, but currently all the burden of this flexibility is picked up by taxpayers and workers.

“This must change. We say that companies should pay higher wages when they are asking people to work extra hours or on zero-hours contracts.

“We need new laws but also much tougher enforcement, to weed out those businesses seeking to exploit complex labour laws, and workers, for their competitive advantage.”

Frances O’Grady, general secretary of the TUC, said: “Employment status is complex, and can deprive people of their rights at work. So the committees are right to call for reform and wide consultation. The time has come for a Royal Commission, including trade unions and employers.”